FOREIGN INVESTMENTS IN SINGAPORE PROPERTIES

Mr Low Thia Khiang asked the Minister for Manpower, in view of the current worsening economic situation, whether he foresees the possibility of prolonged unemployment of up to a year or more for older and unskilled workers.

Mr Low Thia Khiang asked the Minister for Manpower whether Singapore will face structural unemployment in the next two to three years and, if so, whether the current policy on training of workers is sufficient to cope with the situation.

Dr Lee Boon Yang: Older and unskilled workers are the most vulnerable group in an economic slowdown. Whether they will face prolonged unemployment for up to a year or more, depends on several factors. Firstly, are there still jobs for these workers? Yes, there are still many jobs, especially in the services sector, which can be done by older and unskilled workers. Secondly, can this group of workers make the necessary adjustments in terms of nature of work and wages in order to stay employed? They may have to accept lower wages, or work which is different from what they have been used to during this economic slowdown. Thirdly, how quickly can they acquire some useful skills which will help them to find alternative jobs? This is a critical factor. Apart from the economic slowdown, we are also undergoing restructuring towards higher technology and higher value-added industries. New jobs being created will need higher skills. Older workers, who are unskilled or lower-skilled, must upgrade themselves if they want to take on these new jobs.

The problem faced by older and unskilled workers will result in structural unemployment. This is essentially a mismatch between supply and demand of labour in terms of skills, occupation or industries.

Our strategy to deal with structural unemployment is focused on skills upgrading and re-training of older workers to meet the needs of the jobs being created by new investments. Hence, the Minister for Finance has allocated $50 million to the Skills Redevelopment Programme (SRP). This will complement the Skills Development Fund's allocation of $50 million for the SRP.

In addition, the Minister for Finance has allocated $20 million to establish a Skills Development Centre. The total budget for the SRP is hence $120 million and is expected to meet the skills upgrading needs for up to 40,000 lower-skilled workers over the next 2 years. We will monitor closely the level of usage of the SRP and ensure that funds are sufficient to provide the training places needed and the scope of training to enhance employability for older workers. This will help us to minimise the impact of structural unemployment.

Mr Ong Kian Min asked the Deputy Prime Minister whether the Government will consider measures to attract foreigners to invest in Singapore properties, in particular, by suspending the restrictions on foreigners borrowing in Singapore dollars to finance their property purchases.

BG Lee Hsien Loong: There is no restriction on foreigners buying private properties in Singapore, other than the long-standing restriction on landed properties and flats in buildings below 6 storeys. Whether foreigners buy properties in Singapore is a matter of supply and demand. The Government should not introduce special measures to favour foreigners who do so, just as it has in the past resisted calls to make it harder for foreigners to buy Singapore properties.

The restriction the Member refers to is on financing of property purchases by foreigners using Singapore dollars. It was introduced to ensure that such foreigner buyers were serious investors with their own sources of funds, and were not borrowing Singapore dollars from banks here to speculate in the Singapore property market. Permanent residents are allowed to borrow in Singapore dollars to purchase one property, for owner occupation.

As the objective of the restriction still remains valid, the Government has no plans to lift the restriction.